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Investing.com -- Sanoma stock dropped 5.3% after the company announced a new set of financial targets for 2026-30, with mixed reception from investors despite some positive elements in the strategic plan.
The Finnish media and learning company lowered its leverage target to below 2.5x net debt to adjusted EBITDA, down from the previous "below 3.0x" goal, while reaffirming its dividend policy of a growing dividend with a 40-60% payout ratio of free cash flow. Sanoma also updated its FCF definition to include lease liability payments, providing a more accurate reflection of funds available to shareholders.
For the group as a whole, Sanoma projects its adjusted operating profit to grow at a high single-digit CAGR over the 2026-30 period, exceeding the current analyst consensus expectation of 5%.
In its Learning division, the company is targeting a mid-single-digit revenue CAGR, a slight upgrade from its previous long-term target of 2-5% annual growth. The company identified curriculum renewals in major markets like Poland and Spain, along with more personalized learning enabled by AI, as key growth drivers. M&A remains part of the company’s growth strategy for this segment.
For the Media division, Sanoma aims to maintain stable net sales, a more conservative approach compared to its previous target of net sales growth of +/-2% per year. The company expects adjusted operating profit in this segment to grow at a low single-digit CAGR, with digital transformation and advertising growth following the opening of the Finnish gambling market in 2027 as primary catalysts.
"The higher ambition for the Group and the Learning division in terms of revenue growth and profit generation should drive positive consensus revisions, although this will be partly offset by the softer outlook in Media. Overall, we see the new targets as positive for the Sanoma equity story," noted analysts at Kepler.
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